Fastest Eagle Ford Shale Well Drilled By EOG
In a recent conference call to investors on Nov, 2, EOG chairman Mark Papa discussed ways that the company is using to reduce per – well costs in the Eagle Ford shale. Among the ways they are achieving this objective are improvements in Eagle Ford shale well drilling and completion time, improved frac techniques and utilizing contract pumping services for frac jobs.
EOG’s Fastest Well Drilled In Eagle Ford Shale
The fastest Eagle Ford shale well drilled by EOG thus far is the Cusack Ranch #5H, which was drilled and cased to a depth of 15,467′ in only 13 days.
This appears to be a depth / time record that has yet to be matched by any other operator in the Eagle Ford shale. One of the hallmarks of EOG Resources’ overall success in the industry is an “assembly line” approach to drilling and well completion. By following this “cookie cutter” type strategy they have achieved one of the lowest overall per – well costs in the Eagle Ford shale play.
Along with reduced well drilling time, improved frac techniques and service company savings, Mr. Papa expects EOG to shave another half million dollars in per – well costs in the coming months as they use self – sourced frac sand from their own mine. No mention was made of where the frac sand mine is located, but the company recently began operations at a mine at Chippewa County, in Central Wisconsin and is nearing the start-up of operations of a new frac sand processing plant in Chippewa Falls, WI. EOG is also in the process of developing its own frac sand mine in Cooke county, Texas.
Due to these cost cutting measures, the company expects to soon see Eagle Ford shale well costs at around $5.5 million. EOG Resources reports that it is the Eagle Ford shale’s lowest cost oil producer.
Results Of Well Spacing Tests By EOG
EOG Resources’ original estimates of 900 million barrels of recoverable oil from their acreage in South Texas, (net after royalty) were based on a 130 acre well spacing plan. The company is experimenting with reduced well spacing, which could dramatically increase the amount of recoverable oil in their acreage in the Eagle Ford shale. The company has closely monitored wells drilled with reduced spacing at the King Fehner Unit lease for more than 150 days, and reports favorable results. EOG is testing six additional multi – well plots of varying densities, but is not yet ready to make a firm technical call regarding well spacing.
“Knife’s Edge Of Takeaway Capacity In The Eagle Ford”
In the conference call Mr. Papa stated that the company would continue to be on the “knife’s edge of takeaway capacity” until mid 2012 when the Enterprise expansion is completed. Meanwhile they are moving over 15,000 barrels a day by rail, most of which is capturing LLS pricing. (Light Sweet Louisiana which trades higher than WTI or West Texas Intermediate). Overall, Eagle Ford shale oil is now trading at prices higher than WTI.